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Category: Saving money

It is always worth checking that you are paying the correct amount of tax. Not everyone does but making a few checks, is time well spent.

The wrong calculation could leave you out of pocket or worse in line for an unexpected tax bill.

HM Revenue and Customs (HMRC) use information about wages and pensions to work out what tax to deduct, unfortunately, anything incorrect or missing can put a ‘spanner in the works’ and result in inaccuracy. This is more likely to happen if you do not submit a tax return or have multiple jobs or pensions.

What you need to do:

If you get a PAYE P800 tax calculation from HMRC there should be some notes with it to explain each section, so if there is anything you are unsure of this should help. www.hmrc.gov.uk/helpsheets/p800-notes.pdf

Other documents which you can use to help check the figures on your P800 are:

form P60 – you get this at the end of each tax year

form P45 – you get this when you leave a job

PAYE Coding Notice

P11D Expenses and benefits (business owners only)

P9D Expenses payments and income from which tax cannot be deducted

bank and building society statements

If you think that HMRC have made a mistake, it is best to write to them and explain what you think needs amending. Keep a copy of your letter in case you need to refer to it later.

The address for PAYE enquiries is:

HM Revenue & Customs
Pay As You Earn
PO Box 1970
Liverpool
L75 1WX

You should also consider:

If you have made pension or gift aid contributions, and HMRC don’t know about it, it could affect your tax.

Blind persons allowance is often forgotten. This also includes anyone with severely impaired sight, and can be transferred to a spouse, so it is worth checking if you are eligible.

Employees may be able to claim the cost of laundering uniforms needed for work, if their employer does not provide this service or recompense.

If it all seems a bit much we are more than happy to help, and can also apply for a tax refund on your behalf should you be entitled.

In the tax year a young person becomes 16, they may subscribe to both a Junior ISA and (once 16) a regular cash ISA. This would allow them to use BOTH investment allowancs to total limit of £8,940 (2011/12 rates).

They would also be able to invest in both during the next tax year in which they would turn 17.

In the year they turn 18, they can invest in the Junior ISA to the limit, as long as it is before their 18th birthday. Once 18, the Junior ISA is converted to a regular ISA.

If you paid a mortgage for most of your working life to purchase your home, it could be taken from you in your last few years.

Do you think it is fair ?

If you are one of the millions that think the system is unfair, and that it penalises those that work hard to provide for their future, and that of their loved ones there is a solution.

Do you want to protect your savings and inheritances from being swallowed up by long term care fees ?

This question is worth asking because should you or any of your family ever need to go into a care home, you may find most of your savings taken by the government to pay for care home fees.

The facts are quite alarming. Surveys show that:

Typical care fees can cost £30,000 per year or more.

If you have assets or capital (ie) your home is worth over £23,000, you would be expected to pay 100% of the cost of your care home fees.

As people live longer, the cost of fees can seriously erode an inheritance.

What you can do.

There is a way to protect savings and inheritances from this, through the use of an Asset Protection Trust. This allows your assets to be ring fenced from long term care costs. You will still have access to the money and assets in Trust when needed, but can avoid it being used when calculating your contribution to care home fees.

As you would pay less in care home fees, this leaves you more left over to spend during your lifetime and pass on to your loved ones on your death.

In order for this to work, an arrangement needs to be in place long before care is needed, as it cannot be done retrospectively or once the need for care arises.

Don’t leave it too late to get something in place. We can advise on this issue with a free one hour consultation available on request. Please call us to make an appointment with our tax expert.

With a both businesses and householders tightening their belts while coping with rising costs, we thought a few energy cost saving ideas would be very useful:

Everyone

At this time of year the temperature drops very quickly. Save on energy costs by closing blinds or curtains when the sun has gone down.

Consider fitting movement sensors to turn lights on/off in places that are not in constant use. eg) Toilets, Copier or Filing rooms etc.

If you live in an older house, do a room by room plug review to see what is plugged in and what it operates. Stick a label on the plug to remind you of items that do not need to be continually switched on. If you use extension leads ensure that each socket has an individual switch, so if you need to leave an item on continually, you turn can anything else off.

Check your computer monitor brightness settings. Is it set to a default of maximum ? Does it really need to be so high ? Adjust to a comfortable setting.

Do you use your computer at infrequent intervals during the day ? If so and your computer is normally left on, then consider using hibernate to reduce energy use.

This function saves what is open onto disk and shuts down your computer for you after being inactive for a set time. Then when you turn it back on, reopens everything you were using before shut down. (Quite a timesaver) This can be accessed via your control panel, power options and hibernate tab = enable. (Windows XP users).

Can also be useful for kids/teens computers when they disappear to watch TV and leave it on.

Implement a “last one out makes sure it off” policy with a reminder sign by the door, to ensure electrical items turned off at night.

If you use compressed air tools, check for and eliminate any leaks, as this will reduce energy useage.

Interest free business loans are available from The Carbon Trust for purchasing energy efficient equipment. Please see their website for case studies and further information.Carbon Trust case study link

I hope you have found these ideas are helpful, if you would like additional information, we have produced a booklet on Sustainability which is available free on request. Please email gwhite@blomfields.com with your details to request a copy.